Billionaire hedge fund manager Ray Dalio says the economy isn't growing because 'the world has gone mad'
Ray Dalio recently spelled his thesis on why the economy is broken in a LinkedIn post titled: "The World Has Gone Mad and the System Is Broken."
Dalio also attacked the country's ballooning debt and disproportionate access to credit, which is fueling the wealth gap. "Large government deficits exist and will almost certainly increase substantially, which will require huge amounts of more debt to be sold by governments — amounts that cannot naturally be absorbed without driving up interest rates at a time when an interest rate rise would be devastating for markets and economies because the world is so leveraged long," Dalio wrote.. This is a 26% increase from 2018 and the largest gap in seven years.
"This whole dynamic in which sound finance is being thrown out the window will continue and probably accelerate," he wrote."Right now many pension funds that have investments that are intended to meet their pension obligations use assumed returns that are agreed to with their regulators. They are typically much higher than the market returns that are built into the pricing and that are likely to be produced," Dalio wrote.
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